Hauppauge captures not playing back properly

I've been trying to capture videos from my DirectV reciever to my PC using a Hauppauge HD-PVR 2 1512. I seem to be able to capture fine but there is a problem with playback using XBMC. The PVR captures AVC in TS,M2TS, and MP4 containers. I've tried them all with various bit rates and resolutions but non seem to play back properly on my ATV2 runing XBMC 12.3.

I've even tried capturing 480p at a very low bitrate. While the playback is somewhat better it's still choppy and buffers a lot.

I installed Gotham onto another Windows 7 machine and it plays fine.
It even plays fine with either 5.1 optical selected as a source or HDMI which is only 2.0. That leads me to believe that the audio is not the issue.

I've also upgraded me ATV2 to Gotham and get the same results with the 5.1 and 2.0 audio source.